Investors are keenly awaiting US November inflation data and next week's Federal Reserve meeting
Global stocks diverged on Friday after hotter-than-expected US wholesale prices renewed concerns that the Federal Reserve will stick to aggressive policies against inflation.
Investors have been poring over economic data as they try to guess whether the US central bank will shift to a softer approach to interest rate hikes or maintain its hawkish stance at a regular meeting next week.
China’s easing of its zero-Covid restrictions, which have hammed the world’s second biggest economy, have been welcomed by the markets this week.
Investors also tracked news that China’s consumer inflation slowed further in November, falling below two percent and providing authorities room to unveil fresh stimulus measures.
Hong Kong shares closed sharply higher Friday, building on big gains for the week while Chinese mainland markets were also higher.
European markets were up in afternoon trading.
But Wall Street opened lower as US government data showed the producer price index (PPI) — a gauge of inflation — rose by 0.3 percent in November, slightly higher than forecast by analysts.
“The numbers themselves weren’t mean so to speak. They were simply less friendly than what market participants had hoped they would be,” said Briefing.com analyst Patrick O’Hare.
The reading will raise concerns that key consumer price data due next week may not be “as friendly as expected either, which in turn will keep the market on edge about the Fed’s monetary policy path,” he said.
The Fed has raised rates by 0.75 percentage points in four straight meetings in efforts to tame four-decade high inflation.
The central bank is widely expected to slow the pace to 0.50 percentage points at its final meeting of the year next week.
But investors are concerned that a strong jobs market and other data might convince the Fed to keep tightening monetary policy longer than had been hoped.
The European Central Bank and the Bank of England also have rate decisions due next week after also hiking their rates sharply this year.
“The hotter-than-expected PPI print called into question the ‘peak inflation’ narrative, although traders know that it is too late for the Fed to change its mind about a 50 (basis points) hike next week,” said Fawad Razaqzada, market analyst at Forex.com and City Index.
Elsewhere, oil prices jumped by more than one percent as Russian President Vladimir Putin threatened to cut production after Western nations imposed a $60 price cap on Russian crude.
– Key figures around 1450 GMT –
New York – Dow: DOWN 0.3 percent at 33,693.79 points
London – FTSE 100: UP 0.2 percent at 7,484.25
Frankfurt – DAX: UP 0.5 percent at 14,333.84
Paris – CAC 40: UP 0.3 percent at 6,664.75
EURO STOXX 50: UP 0.3 percent at 3,933.79
Tokyo – Nikkei 225: UP 1.2 percent at 27,901.01 (close)
Hong Kong – Hang Seng Index: UP 2.3 percent at 19,900.87 (close)
Shanghai – Composite: UP 0.3 percent at 3,206.95 (close)
Euro/dollar: DOWN at $1.0534 from $1.0560 on Thursday
Dollar/yen: DOWN at 136.44 yen from 136.61 yen
Pound/dollar: UP at $1.2262 from $1.2239
Euro/pound: DOWN at 85.89 pence from 86.24 pence
Brent North Sea crude: UP 1.2 percent at $77.08 per barrel
West Texas Intermediate: UP 1.4 percent at $72.44 per barrel
